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European and Asian stocks fell on Monday as investors worried that slowing global demand could weigh on the chipmaking sector.
The pan-European Stoxx Europe 600 fell 0.6 percent as it was dragged lower by healthcare and utilities stocks, while the Cac 40 in Paris lost 1 percent and the Dax in Frankfurt fell 0.6 percent, extending early morning losses extended.
In Asia, Hong Kong’s Hang Seng index fell 1.4 percent and South Korea’s Kospi fell 1 percent, while markets in Japan were closed for a holiday. China’s CSI 300 was the only increase in the region, up 0.5 percent.
The moves reflected a technology-driven sell-off on Wall Street in the previous trading session, sparked by news that Taiwan’s TSMC – the world’s largest contract chipmaker – had told its key suppliers to delay shipments of high-end chipmaking equipment.
TSMC, which lost 3.2 percent on Monday, warned of a widening slowdown in the chipmaking sector as the recent boom in artificial intelligence technology struggled to offset broader economic headwinds and China’s stalled recovery.
Oslo-listed Nordic Semiconductor fell 12 percent after cutting its third-quarter sales forecast.
Shares of Dutch chipmaker ASML fell 1.1 percent, STMicroelectronics fell 1.8 percent and BE Semiconductor lost 3.2 percent. South Korea’s SK Hynix lost 2.8 percent.
The moves came as traders prepared for interest rate decisions from three of the world’s largest central banks this week. In the USA, the Federal Reserve is likely to leave its target range unchanged between 5.25 and 5.5 percent.
“Further rate hikes would plunge the economy into a hard landing scenario,” said Thomas Simons, senior U.S. economist at Jefferies. “Instead, the Fed can pursue a strategy that aims to maintain current interest rates over a long period of time.”
Futures contracts tracking Wall Street’s benchmark S&P 500 and those tracking the technology-focused Nasdaq 100 both rose 0.1 percent ahead of the New York open.
The Bank of England, which will also hold a rate-setting meeting this week, is expected to raise its key interest rate by a quarter of a percentage point to 5.5 percent, while the Bank of Japan is expected to leave rates unchanged at minus 0.1 percent.
Adding pressure to policymakers is that inflation numbers in the U.S. and Europe rose slightly recently as oil prices hit their highest level of the year after top producers announced further supply cuts.
Brent crude rose 0.4 percent to $94.32 a barrel on Monday, remaining near its highest level since November 2022, while the U.S. equivalent West Texas Intermediate rose 0.6 percent to $91.31 a barrel .
Source : www.ft.com